Question

Based on the following information from Schrute Company's balance sheet, calculate the current ratio. Current assets $ 147,000 Investments 62,000 Plant assets 450,000 Current liabilities 59,000 Long-term liabilities 110,000 Retained earnings 490,000

Answer 1

2.49 times

Step-by-step explanation:

The computation of the current ratio is shown below:

Current ratio = Total Current assets ÷ total current liabilities

where,

Total Current assets = $147,000

And, the total current liabilities = $59,000

So, the current ratio is

= $147,000 ÷ $59,000

= 2.49 times

By dividing the total current assets by the total current liabilities we can get the current ratio and it always be expressed in a ratio